Streamers Woo Advertisers at 2023 Upfronts

Headwinds are making for a tougher sale on TV and streaming

Big Media held their “upfronts” meetings last week. These are the dog-and-pony shows where the broadcast and cable companies woo advertisers. Traditionally, studios land enough deals to sell most of their ad inventory through the next TV season. Let’s take a look at the upfront highs and lows.

In this issue:

  • Tough times in ad land and disrupted schedules

  • New services for advertisers

  • … and Netflix has entered the house

Tough times for ad sellers

Advertisers are holding back amid recession fears, US budget debates, and other uncertainty. At the same time, advertisers have more places to spend their money. Analysts still expect ad spending to increase this year but at lower levels.

Adding to the economic headwinds, the Writers Guild of America’s strike forced studios to revamp their Fall programming.

Sports and news, usually not a factor, played prominent roles in the upfronts — Disney devoted half of its presentation to ESPN.

Unscripted television was also a major focus. For example, CBS announced that Survivor and The Amazing Race episodes during the Fall season will run for 90 minutes to fill Thursday night’s prime time slots.

Making spending easier for advertisers

In the March 23 issue, I talked about the Roku/Best Buy team-up and how retail media networks are giving advertisers one-stop-shops for ad spending.

The big content companies are launching similar services as they consolidate their streaming operations. They hope the size and reach of their operations will make it easier for advertisers to spend money on their various channels.

NBCUniversal launched a program that gives the largest advertisers access to global, country-level, or locally-targeted ad inventories. Their pitch is that this service will be more flexible and allow for more agile ad spending. An advertiser could react to market conditions by shifting its budget from the US to Europe or from broadcast to streaming.

As for Warner Bros. Discovery, consolidation is not complete at. The media giant rolled out separate services for ad sales on its streaming services and on its broadcast, cable, and digital sales channels. WBD execs highlighted new advertising programs like the Brand Block, which gives advertisers every pre-roll and mid-roll ad during a show. InFront, another program, will let an advertiser give viewers an ad-free experience (after the sponsor’s mandatory pre-roll ad, of course).

Awww, Netflix is really trying

Now that Netflix is in the ad business, the streamer held its first “upfronts” session. It wasn’t a very auspicious start. Last-minute jitters over angry writers caused executives to switch from a live event in New York to a virtual event.

Most advertisers are taking a wait-and-see approach to Netflix. With less than 1 million ad-supported subscribers, the streaming platform is still a small fish in a big advertising ocean. However, Netflix’s top-line numbers hide some advertiser-friendly trend lines. In countries with ad-based plans, more than 25% of new accounts are going for the cheap ad-supported option.

The plans also have enticing demographics. Globally, the median age of ad-supported subscribers is just 34, and more than 70% of ad plan members are between the key 18 to 49 demographic.

Our takeaway: Maybe writers have more power than pundits think?

With Fall lineups in turmoil and advertisers getting pickier about their ad budgets, the big media companies have their work cut out for them. It will take longer to sell their ad inventories — which could give the Writers Guild of America an opportunity.

If studio execs think they can ride out the strike, writers don’t have much power. But what happens when the TV and streaming moguls start reporting bad numbers to Wall Street?

I’ve always thought this strike wasn’t going to be over anytime soon — the stakes for writers are too high. But timing the strike during an ad slump could give the writers an accidental advantage that brings the studios to the table faster.

The Watchlist

Arnold Schwarzenegger makes his television debut in FUBAR. The crime series is available to stream on Netflix now.

Want to read about science news with a refreshing and snarky delivery? Check out Important, Not Important! This free newsletter helps you to think deeply and act decisively about the most pressing scientific news, all while making you laugh.

I Think You Should Leave with Tim Robinson returns for its third season on Netflix, premiering Tuesday, May 30th.

Singing meets drag in the second season of Queen of the Universe, the competition show hitting Paramount+, Friday, June 2nd.

Basketball drama Shooting Stars starring Dermot Mulroney and Wood Harris comes to Peacock, Friday, June 2nd.

HBO and Sam Levinson’s latest collab, The Idol, premieres on HBO and Max (formerly HBO Max), Sunday, June 4th.

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